Thursday, December 22, 2016

Delta Thumbs Nose At Trump Border talk With Aeromexico Tie-Up


Delta thumbs nose at Trump border talk with Aeroméxico tie-up

“You can keep your distance on the ground,” Aeroméxico, the Mexican airline, intoned in a pre-US election advert, taking aim at Donald Trump’s promised border wall. “But in the sky, we’ll show you it’s different.”
The company has now put its money where its mouth is, swallowing tough regulatory terms to win approval for a $1.5bn tie-up with Delta Airlines of the US in what the two companies are billing as a historic cross-border alliance, writes Jude Webber in Mexico City.
“This agreement will mark the beginning of a new era in the aviation of North America, as the first and the largest cross-border alliance between Mexico and the United States,” Aeroméxico CEO Andrés Conesa said in a joint statement.
Echoing Mexico’s position vis-à-vis cross-border trade in general with the US, Delta CEO Ed Bastian said:
Together, Delta and Aeroméxico are stronger in the U.S.-Mexico market than either airline can be on its own … The partnership will make it possible for us to offer customers more flights to more destinations, with more choices every time someone travels across the border.
To win regulatory approval, the airlines had to relinquish 22 slots in Mexico and 6 in New York, but Mr Bastian promised the tie-up would bring both more services and more jobs. The airlines promise “seamless operations”, joint marketing, better connecting schedules for more frequent flights to more places, as well as a better customer experience on the ground.
“The airlines have been partners for 22 years. The regulatory approval represents an important milestone in the process, announced last year, to launch a cash tender offer for Delta’s acquisition for up to 49 percent of Grupo Aeromexico S.A.B. de C.V., capital stock, further strengthening the partnership between the two airlines,” they said in the statement.
Mexican regulators had objected to the original terms of the deal, saying it could force up prices on routes because of a reduction of competitive pressures. It would also have meant other airlines would have struggled to gain slots at Mexico City’s saturated international airport.